So Many Products, So Little Time

With finance reserve under attack, dealers must be increasingly selective when it comes to F&I products. Top trainer offers guidelines for choosing the products that offer the most value to your dealership and your customers.

July 2016, Auto Dealer Today - Feature

by Ronald J. Reahard - Also by this author

When F&I first became a separate department 40-plus years ago, most dealers only offered four products in the F&I office: financing, credit life insurance, credit disability insurance, and vehicle service contracts. In reality, credit insurance wasn’t even sold. It was simply included in the financing and, if a customer objected, its inclusion was justified as simply being a “standard contract feature.”

Today, the number and variety of F&I products has grown to include guaranteed asset protection, tire and wheel road hazard protection, environmental protection, theft-deterrent products, maintenance plans, paintless dent repair, key replacement, windshield chip repair, and excess wear and tear coverage. … And all of these products have to actually be sold, not simply packed into the monthly payment!

With new-car profits almost nonexistent for many franchises, some dealers also now offer window tint, paint protection film, remote starting systems and other vehicle accessories in the F&I department, resulting in managers presenting as many as eight, nine or 10 products on a menu. The idea here is that if you offer enough products, virtually every customer will find something they need, and the dealership will make more money.

Unfortunately, offering more products doesn’t necessarily translate into more profit.

Minute by Minute

The more products you offer in the F&I office, the more time customers spend in that office. It takes time to discover the customer’s need for each product, explain what that product does, and demonstrate how that product will benefit the customer. With car buyers demanding the F&I process take less time, to maximize both profits and customer satisfaction, we are left with a pressing question: Which products, and how many products, should you offer?

There is one thing I know for a fact: An uninspired, unenthusiastic, halfhearted presentation of 10 products will never be as effective or as profitable as a passionate, customer-focused, needs-based presentation of two or three products. It is the F&I manager’s belief in a given product, the enthusiasm for that product, and the absolute conviction that a customer needs the product, that will enable him or her to help the customer see the need for that product.

So the first decision every dealer must make is which F&I products you want to offer customers in connection with their purchase. Whatever products you choose, they must be products you believe in. And your belief in those products must be communicated to everyone in the dealership; and not just in words, but in actions. When you sell a car to a friend, a family member, or a business associate, you must also encourage them to purchase all the F&I products you offer.

Every F&I product you offer should enhance the customer’s ownership experience, help protect their investment, protect their credit or provide them peace of mind. Obviously, some products will sell better than others in certain markets with specific vehicles. The demographics of your customer base also plays an important role. Credit life and disability insurance may be perceived as a waste of money by a wealthy neurosurgeon leasing herself a new Mercedes. For an underinsured construction worker and first-time buyer living paycheck to paycheck, it might just be the most important option available in connection with the purchase of his base model Colorado.

Tangible and Intangible

Once you decide which products you want to offer, the next decision has to be who should be presenting those products to the customer. There are countless products and accessories that can enhance the customer’s ownership experience. However, there is a big difference between selling a tangible product and selling an intangible product.

Selling a tangible product requires creating desire. Selling an intangible product requires discovering a need. This demands a totally different skill set and specialized training. In the F&I office, your F&I managers should be selling intangible products, not tangible products.

Vehicle accessories like bedliners, remote start and window tint are tangible products. If you want salespeople to sell additional products and accessories, you have to pay them for it! Salespeople have to feel it’s worth their time and effort or they won’t do it. Other popular products in a particular region, such as remote start or other accessories, can simply be pre-installed and included on an MSRP addendum sticker.

The last decision every dealer has to make is how many products an F&I manager can realistically discover the need for (and demonstrate the benefit of) in the limited amount of time they have with a customer. While every product is designed to help the customer, if we’re unable to convey how that product will benefit them specifically, and they elect not to purchase it, we didn’t help them. We wasted their time.

If your F&I department is not achieving at least 10% penetration with a particular product, you need to reconsider whether or not your dealership should even continue to offer that product. Because at only 10% penetration, that means 90% of the people did not feel the product would benefit them. The question is, why?

It may be because your F&I manager doesn’t believe in the product or needs additional training on the benefits of the product or overcoming objections. It may be due to their compensation plan. Or it may be that, in your market, with your vehicles, customers perceive the product to be of little or no benefit.

Credit life and disability may not offer much value to older, well-heeled car buyers
Credit life and disability may not offer much value to older, well-heeled car buyers

Product Overload

An F&I professional has a responsibility to the dealership, and to a customer, to review all the options available in connection with their purchase. Unfortunately, it is virtually impossible for even the best F&I manager to sell more than two or three products to a customer, because after the second or third product, they realize they’re being sold. However, a customer can and will buy five, six or even more products, if the products they want are in a package that includes them.

That’s one of the biggest advantages of using a menu. It allows a customer to buy more products than we can sell them. But there is a limit. A customer who wants two or three products may very well select an option package that includes four or five products. But they will not buy nine products when they only want one or two.

The top dealerships in the country with the highest F&I income typically offer no more than five or six products in the F&I office. After that, it becomes more than the customer can absorb. Every dealership has to establish its core F&I products and make it easy for a customer to buy multiple products without enduring multiple presentations. That’s where the menu comes in.

Your “Preferred Option” should include no more than five or six products that offer customers the most value. The customer then forfeits one or more products in the “Standard Option” or selects at least two products with a “Basic Option.” An “Alternative Option” brings the option of a longer term. Once an F&I professional helps the customer see the benefit of one or two products, most customers will purchase a package that includes those products and add one or two more.

So how many products is too many? The answer is seven. Six products is the absolute maximum you should have listed on a menu, and five is preferable. With that said, some ancillary products like key replacement, paintless dent repair and windshield chip repair can be combined into a bundled offering. It is critical that every product offered provides real customer value, and every product is offered to every customer every time.

If your goal is to maximize product sales and profits, you can neither expect your F&I pros to sell too many products nor limit them by having too few. And they must be presented on a menu with no option package containing more than six products or fewer than two products. This helps reduce the time customers spend in the F&I office, and makes it easier for them to buy multiple products.

Your finance reserve is under attack. You have to identify the products that offer your customers the most value and provide the greatest income opportunities. Then you have to give your trained F&I professionals the opportunity to help every customer select an option package that best fits their needs.

Ronald J. Reahard ranks among the industry’s leading F&I trainers, authors, consultants and speakers and is president of Reahard & Associates Inc., winner of a 2016 Dealers’ Choice Award for F&I Training. Contact him at

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  



Jim Ziegler
The Big Talent Drain

By Jim Ziegler
The Alpha Dawg tackles the shortage of talent in the managerial ranks and reflects on Amazon’s rumored foray into vehicle sales, the imminent used-car correction, Hyundai’s plan for the Genesis brand, and the untimely passing of Tammie LeBleu.

A Faster Horse

By Jim Ziegler
The Alpha Dawg wonders where the demand for driverless vehicles is coming from and has good news and bad news — but mostly bad news — for Fiat Chrysler and Cadillac dealers.

Strangers in the Mall

By Jim Ziegler

You Can’t Handle the Truth

By Jim Ziegler

Opening Observations

Over the Curb